Part 3- Manage your facility. A properly managed warehouse can delay or eliminate the need to enlarge your existing warehouse space or construct a new one. You can also reduce or eliminate the dependency on outside storage facilities and associated costs. By reducing inventory levels as described above you can better utilize your existing facility and further leverage that investment.
Some distributors physically separate inventory in an attempt to reduce picking, shipping, as well as valuation errors. This of course creates a situation where your warehouse space is not utilized to its fullest. By implementing improved processes and new systems aimed at managing your warehouse you can eliminate the need to keep inventory separate. Implementation of put away rules as well as an efficient picking process will allow you to manage this situation.
An increase in labor utilization and labor reallocation as outlined above will also have a positive impact on expenses related to material handling equipment. If you need fewer people to do more work, you will of course need less equipment and less maintenance on this equipment. Future equipment needs may be eliminated or much delayed because of this fact as well. Most companies have seen an increase in equipment utilization of 10% to 30% as well. These companies get the most from their investments in facilities and equipment.
Make money here:
Eliminate or reduce need to enlarge storage or construct new storage facilities.
Reduction in material handling equipment.
Realize equipment utilization increases from 10% to 30%.
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